The Cloud and Beyond

Technology and communication go hand-in-hand. Facebook, Twitter, e-mail, instant messaging, and the smartphone—all of which are usually within arm's length—tell us that technology is all about connecting. In the pharmaceutical industry as much as anywhere else, new technology leads to new ways to keep in contact: sales reps with providers, physicians with patients, and marketing departments with payers. Although the technology behind cloud computing is now well understood, pharma is still struggling to identify the best and most practical ways to leverage its potential in line with the standard regulatory and confidentiality concerns.

The most important element in assessing possible applications of the cloud is to establish a clear definition of what it is. With service providers and pharma companies tossing around phrases such as "software as a service" and "multi-tenancy" and defining those terms in whatever way casts their own business in the best possible light, how can Big Pharma make sense of what we're hearing? Here is Pharm Exec's take: At its most basic, "the cloud" is a server—stored on the Internet and accessed via a service provider—used for delivering, deploying, and running any number of software applications, from clinical trials to drug distribution to automated call centers. To coin a useful analogy, if you've ever been in an apartment complex, you already have a basic understanding of the cloud.

"You have a house and I have a house," explains Matt Wallach, chief strategy officer of Veeva Systems, a cloud-based business solutions provider for the global life sciences industry. "You own a lawnmower; I own a lawnmower. You have a rake; I've got a rake. You have a shovel; I've got a shovel." However, explains Wallach, "Multi-tenancy is the thing that makes cloud computing special. If you live in an apartment building, we share things. We share the exterior of the building, and we don't own tools anymore. If you ever meet someone who lives in an apartment building, they don't own a shovel. They don't have a lawn mower." They don't need to; either they can borrow one from someone else in the building or they can just let the building's maintenance staff handle an issue, should it arise. The point is, you'll have the right tools you need for the job at your disposal, but they won't be taking up space in your closet, shed, garage, and so on.

From here, it's pretty easy to see how Wallach's apartment analogy translates to the benefits of something like cloud computing for Big Pharma. "If they put in a new elevator, you as a tenant on the tenth floor don't have to install the new elevator. You just step into it. You've got to look at it from the customers' perspective. It's really good for the customers if they don't have to pay for upgrades." In other words, the cloud is a major source of efficiency by providing common platforms that allow for a sharing of costs related to the production and dissemination of useful information.

Benefits to Big Pharma

Why is such a pay-as-you-go model useful, particularly to the healthcare industry? With patent cliffs approaching fast, healthcare reform and aging baby boomers adding more patients (but not more physicians) into the mix, and R&D costs skyrocketing, it's no secret that saving money has become crucial to the industry. And cloud computing saves costs in a number of ways, from initial setup of productive technologies, to long-term maintenance, to upgrades and troubleshooting. Storage of data, too, has become more efficient with the cloud. Gone are the days of filing cabinets, of storing everything on your computer and then backing it up on the server, and of giant, bulky towers taking up space in your office: "The cloud" (storage on the Internet) is now your filing system—light as air, with nothing to update, troubleshoot, or maintain.

It's not just IT (information technology) costs that make the cloud a worthwhile investment. The ease of use and the ability to communicate with a team across the globe can be crucial when it comes to stopping or turning on a dime, as the regulatory environment of pharma often requires. "In a highly regulated market like pharma, the ability to be up and running quickly and then make changes whenever regulatory requires them is one of the big keys to the cloud," explains Don Keane, VP of marketing and product strategy for Angel, a provider of cloud-based customer engagement solutions to pharma and healthcare companies.

"We believe cloud computing will significantly reduce the barrier of entry or the upfront costs [of understanding competitive challenges or opportunities], which is why we think it's so attractive to make these technology investments in emerging markets," says Kevin Julian, technology lead for Accenture Life Sciences Analysts. "I think the primary budgetary benefit of the cloud is to smooth the costs of the IT investment over time, making it easier to adopt the technology in the first place."

"What we're seeing in the last 12 to 18 months is that pharmaceutical companies have tremendous cost pressures on them, not just because of patent expirations, but because of the increasing regulatory climate that they're finding themselves in, not only for advertising and marketing their products in the commercial sector, but also in the clinical and medical sectors," says Greg Henry, life sciences client partner at consulting firm Model Metrics. "There's an increasing demand for more advanced signal detection, more advanced pharmacovigilance around the long-term safety profile of a product."

"Industry's in the business of discovering pharmaceutical products and bringing them to market. They're not in the business of IT. That's not their core competency—it's our core competency," says Mike Naimoli, worldwide managing director of Microsoft Life Sciences. "They want to focus their energy on innovation around product discovery, product management, and innovation of pharmaceutical products, which is tough enough as it is. I think what cloud computing can provide is an opportunity to get it right once and then provide the industry access to it."

On top of budget and regulation restraints, the potential for open and effective communication is one of the most-cited benefits of bringing pharma to the cloud. "When one person is working to solve one problem, they may discover information that isn't relevant to what their task is," explains DJ Edgerton, CEO and co-founder of digital innovation agency Zemoga. "But when they're aware of challenges in research that someone else is trying to achieve, that 'Aha!' moment happens a lot more quickly when information is shared. It was difficult to share it before the cloud, before technology allowed for this sort of global collaboration; now it's happening."

From cloud service providers, to healthcare ad agencies, to life sciences analysts, everyone Pharm Exec spoke with unanimously boiled down the benefits of the cloud to one word: collaboration. "I think there's a nice convergence of opportunity there when you look at some of the collaborative technologies that exist. I think the primary benefit in that regard is the speed with which one can assemble collaborative capability with internal and external partners," says Julian.

"Every CIO that I know of or have heard of in the life sciences industry is seriously evaluating how they can migrate ... to a cloud infrastructure," confirms Henry.

Safe and Secure

Of course, we are still often wary of the unknown. And with good reason: Industry sales and marketing materials, R&D procedures, or clinical trial results in the wrong (competitor's) hands could prove disastrous. So what are some of the fears and doubts about security and confidentiality in the cloud? Are they grounded?

"When we tell customers that all of their proprietary, compliant, secret, special sauce that they've kept inside their firewall is now going to be floating up there in the cloud, they think that anyone can hack in," says Edgerton. "There are a lot of people who own gold that they've never put their hands on, but they know they own it. You can buy and sell gold, oil, and all of these things that have huge value, and you never touch them. It took a long time for the financial community to come to terms with that. People think when they own gold, it's a bar of gold and it's sitting in some safe somewhere, probably on their property."

"If you now consider the The Health Insurance Portability and Accountability Act (HIPAA) compliant patient information or the R&D data as that gold bar," continues Edgerton, "pharmaceutical companies have to understand that the protections, just like the thickness of the steel on the safe, have been transferred to the cloud. That desire to keep everything internal and hold onto it because you want to protect it—we need to get over that fear."

The general consensus seems to be that, while such fears are natural initially, most of these companies have been working with cloud-based technology long enough that the bugs have been worked out; cloud computing seems to be no more or less risky than ordering Star Wars memorabilia off of eBay. Firewalls, encrypted data, and security codes have calmed many of the industry's fears. "We don't generally run into security concerns. Part of it is that the cloud is a proven model now ... it's really a non-issue at this point for us," says Mario Martinez, CEO and founder of 360 Vantage, a provider of cloud technology for the life sciences industry. "I think overall, most executives and CIOs that we're working with are pretty comfortable at this point with the security level."